Role of Government in Economy
Role of Government in Economy
Role of Government in Economy
Internet
How China Controls the
Internet
• Chinese government was considered the world’s
worst abuser of internet freedom for the fourth
consecutive year.
News? Movies?
Women’s Rights?
International Trade?
The Role of the
Government in
our Economy
Protecting Competition
Protecting Business Agreements
Protecting Creative Properties
Topics Regulating the Production Process
Government’s Role in Society
How Government is Funded
How Government Allocates Resources
Protecting
Competition
Monopoly
When a company controls an industry or is
the only one to offer a product or service.
Oligopoly
Small number of companies control an
industry
Protecting
Competition
Monopoly
There is no competition
Any price can be charged for products and
services.
Quality may lower
Both limit choices
Protecting
Competition
Trust
Group of companies that band together to
form a monopoly and cut out competition.
Antitrust laws
Allow government to break up monopolies,
regulate them or take control of them.
Federal Trade Commission - FTC
Formed by the government to enforce
antitrust laws
Protecting Business
Agreements
Government enforces Contracts
Contract: legally enforceable agreement
between two or more parties.
Written, verbal or formed over a handshake.
Car Repair
Job Contract
Order
Lease
Car Rentals
Agreement
Protecting Business
Agreements
Breach of Contract: when a party fails to
live up to the terms of a contract.
Easier to prove with a written contract.
Protecting Creative
Properties
Revenue
Income government gets from all sources.
Taxes, fees consumers pay for certain public
goods and services
Privatization
Business that offers a public good or
service
Transfer Payment
Angel Guardian, 120 a los 65, Padrino Empresario,
Red de Oportunidades
Consuming Goods &
Services
Tax
Amount of mo n e y
pe o pl e and b u sin e ss e s
pay gove rnm e nts to
he l p ru n the n at io n .
In c l u d e d in pu rc hase
pr ice .
Taxe s p ay fo r stre e t s,
park s, e d u catio n
How Government Allocates
Resources